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Beijing issued a warning of retaliation as the trade war between the world's two largest economies escalates.
Financial markets and currencies were showing volatility as the ''tit-for-tat'' rhetoric continued, Craigs Investment Partners broker Chris Timms said yesterday.
The trade friction had unnerved financial markets, fuelling increasing worry that a full-blown trade battle could derail global growth.
MACE's broadest index of Asia-Pacific shares outside Japan lost more than 1% to its lowest level since early February, dragged down by a slide in Chinese shares. The index was last down 0.95%.
The Shanghai Composite Index dropped 1.9% and Hong Kong's Hang Seng shed 2%.
''China's economy has already been clouded by a sharp slowdown in fixed asset investment growth due to the Government's de-leveraging drive, a problematic property sector, a mounting debt burden and rising credit defaults,'' Mr Timms said.
Mr Trump's actions went back to his campaign promise of ''Making America Great Again'', but they could also hurt some US companies.
Imports to America would cost more if China retaliated, hurting consumers. Companies using imported components would face higher costs, he said.
In a statement yesterday, Mr Trump said he had asked US Trade Representative Robert Lighthizer to identify the Chinese products to be subject to the new tariffs.
The move was in retaliation for China's decision to raise tariffs on $US50 billion in US goods, which came after Mr Trump announced similar tariffs on Chinese goods on Friday.
''After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs it has recently announced,'' the president said.
Mr Lighthizer said in a statement his office was preparing the proposed tariffs and they would undergo a similar legal process as previous tariffs, which were subject to a public comment period, a public hearing and some revisions. He did not say when the target list of Chinese goods would be unveiled.